EXHIBIT 17 Comparing Traditional and Contribution Format Income Statements for Merchandising Companies (all numbers are given) $12,000 Traditional Format Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling Administrative Net operating income $6,000 600 Contribution Format $12,000 Sales 6,000 Variable expenses: 6,000 Cost of goods sold Variable selling Variable administrative. 5,000 Contribution margin $ 1,000 Fixed expenses: Fixed selling Fixed administrative Net operating income $3,100 1,900 400 7,000 5,000 2,500 1,500 4,000 $ 1,000 For a manufacturing company, the cost of goods sold would include some variable costs, such as direct materials, direct labor, and variable overhead, and some fixed costs, such as fixed manufacturing overhead. Income statement formats for manufacturing companies will be explored in greater detail in a subsequent chapter. Cost of goods sold Beginning Ending = merchandise + Purchases merchandise inventory inventory Cost of goods sold Beginning Ending = merchandise + Purchases merchandise inventory inventory $7,000 + $3,000 $4,000 $6,000 K17 D E F G | K L M N P Q R ST U V V A ? ? 1 Chapter 1: Applying Excel 2 3 Data 4 Sales $12,000 5 Variable costs Cost of goods sold 56.000 Variable selling S800 L Variable administrative 5400 9 Fixed costs 10 Fixed weling $2.500 11 Fixed administrative $1.500 12 13 Enter R Pamuita maaf the cell med WADOW 14 Exhibit 1-7 16 16 Traditional Format Income Statement 17 Sales 18 Coul of goods sold 10 Gruss margin 20 Scling and administrative expenses 21 Saling 22 Administrative ? 23 Net operating income 24 25 Contribution Format Income Statement 26 Sales 27 Variable esp 28 Cost of youuu so ? 20 Variable reing 2 30 Variable administration 31 Contribution margin 32 Fixed expenses 33 Fbed seling 2 34 Fbad administrate 7 35 Net operating income 36 37 38 je 40 41 42 7 7 ? 7 ? Chapter 1 Form +